European coffee stocks reported by the European Coffee Federation (ECF) showed a significant decline, closing 2025 at 7.65 million bags, which marks a 16.1% reduction for the year. This decline is attributed to a decrease in supply resulting from adverse weather conditions affecting harvests, initially from Southeast Asia and subsequently from Brazil. Analysts from Hedgepoint noted that the increasing prices of coffee along with rising financial costs have deterred importing countries from replenishing their stocks further.

In terms of import levels, last year saw a decrease to 46.9 million bags, representing a 5.1% drop from 2024, which is also below the ten-year average. The recent challenges in maintaining stock levels have underscored a broader economic environment where climate change plays a critical role in agricultural yields. As a result, the coffee market is currently facing significant volatility from these altering supply dynamics.

Looking ahead, there is cautious optimism regarding the potential for a record coffee harvest in Brazil for the 2026/27 season, which could lead to a better outlook for coffee stocks. However, the ongoing weather conditions remain a critical concern for stakeholders in this market, highlighting the delicate balance between agricultural productivity and external market pressures, as the climate continues to be a vital factor influencing both supply chains and pricing.